This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. Please submit your questions to him via email for response in future columns. Enjoy!
Question: How did the Arlington real estate market do in 2019?
Answer: Arlington’s real estate market made the national news cycle more than a few times in 2019 with some pretty extraordinary references to rapid appreciation — some accurate and some not. I’ve seen prices in some pockets of the market surge 15-20% in 2019, but for most of the market, appreciation was strong but not eye-popping.
Overall, the average and median price of a home sold in Arlington in 2019 was $705k and $610k, a 6.3% and 8.9% increase over 2018, respectively. Average days on market dropped by one week and an incredible 61.4% of buyers paid at or above the seller’s original asking price. The number of homes listed for sale in 2019 dropped about 17% compared to 2018 and demand surged, with buyers absorbing about 67% more inventory in 2019 than in 2018.
Last week I looked at how Arlington’s condo market performed in 2019 and this week we’ll dig into the performance of the detached and townhouse/duplex markets. I did separate write-ups on the 22202 (Amazon zip code) condo and detached home markets last month and decided not to include data from 22202 in most of the analysis for this week.
Arlington Detached/Townhouse Market Performance
First, we’ll take a look at some of the key measures for market performance across Arlington and within North and South Arlington. I’ve listed some highlights below, followed by a summary data table:
- Median detached home prices increase by 6.7% from $890k in 2018 to $950k in 2019
- Median townhouse/duplex prices increased 8.5% from $530k in 2018 to $575k in 2019
- Average detached homes prices increased by an average of 5.1% and townhouse/duplex homes by 3.6%
- South Arlington appreciated more than North Arlington, particularly in the less expensive townhouse/duplex market
- On average, a detached home in North Arlington is 55.5% more expensive than a detached home in South Arlington and 76.9% more expensive for townhouse/duplex homes
- Buyers accomplished very little trying to negotiate with sellers, averaging just 1.1% off original asking prices on detached homes and paying an average of 1% over the original asking price on townhouse/duplex homes
- The number of new detached homes sold in 2019 was just below the trailing five-year average. Note that not all new homes make it in the MLS, so the actual count is likely a bit higher
Performance By Zip Code
Next let’s take a look at average prices for both detached and townhouse/duplex homes by zip code:
- Over the last five years, the top performing zip codes have been 22202 (National Landing) and 22209 (Rosslyn area), with Amazon HQ2 and Nestle leading the way in the commercial sector for those zip codes, I wouldn’t be surprised to see this trend continue over the next five years
- Nearly all of the appreciation for 22202 came from 2019’s Amazon bump
- If I remove new construction sales from the data, the appreciation percentages remain relatively similar for every zip code except for 22203 and 22213. Without new construction included, 22203 gained 4.5% (instead of zero change) and 22213 gained .5% (instead of dropping 2%), in 2019
Additional Charts/Market Highlights
In each quarter last year, the market produced an average of 15% fewer detached homes in 2019 than it did during the same period in 2018. Interestingly, the market produced more townhouse/duplex homes in the 1st and 4th quarters of 2019 than the same periods in 2018.
Within the detached home market, lower (+5%) and mid-priced (+6.4%) homes appreciated more in 2019 than the upper-end (4.3%) of the market. I think we will see an even sharper appreciation in the lower 25% of the market in 2020.
Since bedroom count is such an important factor in most homebuyer’s criteria, I thought it’d be interesting to take a look at the average cost of a home in 2019 by the number of bedrooms it had. Not much explanation needed for this one!
I will be keeping a close eye on inventory levels as this year starts off. However, I think demand is so high that it would take a significant increase in inventory to slow price appreciation in 2020.
With rates remaining low through last year and projected to do so again this year, coupled with strong employment rates and stocks, buyer confidence is high. On the flip side, markets usually stagnate heading into a Presidential election so it’ll be interesting to see if/how the election effects counter the current momentum.
I think that over the next 5-10 years, detached home prices will appreciate significantly as demand rapidly increases with employment growth, yet we will not be able to introduce any meaningful supply increases due to limits on available land. Condo supply and even townhouse/duplex/triplex supply can be increased with development and changes to zoning laws, but it’s unlikely we will be able to add more supply to the detached market other than one-for-one replacements (tear-downs) and the occasional subdivision of a larger lot.
Thanks for reading along! If you have any questions or I can be of any help with your real estate needs, don’t hesitate to reach out to me at El[email protected].
If you’d like a question answered in my weekly column or to set-up an in-person meeting to discuss local real estate, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at www.EliResidential.com. Call me directly at (703) 539-2529.
Eli Tucker is a licensed Realtor in Virginia, Washington D.C., and Maryland with RLAH Real Estate, 4040 N. Fairfax Dr. #10C Arlington, VA 22203, (703) 390-9460.